- Date : 24/02/2023
- Read: 4 mins
The Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund is an open-ended debt fund that invests in government securities with a maturity of 7 years. This blog provides all the details you need to know about this NFO.
Nippon India Mutual Fund has launched a new fund offer (NFO) called the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund. The NFO is an open-ended debt fund that invests in government securities with a maturity of 7 years. This blog provides all the details you need to know about this NFO.
Understanding the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund NFO
The Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund is a passive fund that aims to track the Nifty G-Sec Oct 2028 Maturity Index. The fund will invest at least 95% of its assets in securities constituting the Nifty G-Sec Oct 2028 Maturity Index. The remaining assets may be invested in money market instruments and other debt securities.
Features and benefits of investing in the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund
- Low-risk investment: Since the fund invests in government securities, it is a low-risk investment option. The risk of default is almost negligible.
- Long-term investment: The fund has a maturity period of 7 years, making it a long-term investment option. Investors who have a long-term investment horizon can benefit from investing in this fund.
- Regular income: The fund aims to generate regular income for investors through interest income on the underlying government securities.
Risks associated with investing in the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund
- Interest rate risk: If the interest rates in the economy rise, the value of the fund may fall. Investors who want to exit the fund before maturity may have to face losses.
- Inflation risk: The fund may not be able to beat inflation if the inflation rate in the economy is higher than the interest rate on the underlying government securities.
- Liquidity risk: The fund may not be able to sell its underlying government securities at a fair price due to the lack of liquidity in the market.
Such type of Mutual fund already exists in the market.
There are similar mutual funds in the market, such as SBI Magnum Gilt Fund, ICICI Prudential Constant Maturity Gilt Fund, and UTI Gilt Fund. However, the key difference between these funds and Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund is the maturity period of the underlying securities.
Also Read: 6 Ways To Measure Risk In Mutual Funds
Who is Most Suitable for This Mutual Fund?
This mutual fund is suitable for investors who are looking for a low-risk investment option with steady returns. Since the fund invests in government securities with a fixed maturity date, it is suitable for conservative investors who want to avoid market volatility. Moreover, since the interest income from the securities is tax-free, it is also suitable for investors who want to minimize their tax liability.
How to invest in Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund:
To invest in this scheme, you can buy units of Rs. 10 each with a minimum investment of ₹1000 and in multiples of Re 1 thereafter. You can choose between the Regular Plan and the Direct Plan, both of which offer only the Growth Option. However, the fund house reserves the right to introduce more options later.
The Direct Plan is available only for investors who buy units directly with the fund. However, the distribution of IDCWs will depend on the availability of distributable surplus.
In conclusion, the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund is a low-risk investment option for investors who want to generate regular income over a long-term investment horizon. However, investors need to be aware of the risks associated with investing in debt funds and should assess their investment objectives before investing in this NFO.
Also Watch: Best Mutual Fund for 2023
Nippon India Mutual Fund has launched a new fund offer (NFO) called the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund. The NFO is an open-ended debt fund that invests in government securities with a maturity of 7 years. This blog provides all the details you need to know about this NFO.
Understanding the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund NFO
The Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund is a passive fund that aims to track the Nifty G-Sec Oct 2028 Maturity Index. The fund will invest at least 95% of its assets in securities constituting the Nifty G-Sec Oct 2028 Maturity Index. The remaining assets may be invested in money market instruments and other debt securities.
Features and benefits of investing in the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund
- Low-risk investment: Since the fund invests in government securities, it is a low-risk investment option. The risk of default is almost negligible.
- Long-term investment: The fund has a maturity period of 7 years, making it a long-term investment option. Investors who have a long-term investment horizon can benefit from investing in this fund.
- Regular income: The fund aims to generate regular income for investors through interest income on the underlying government securities.
Risks associated with investing in the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund
- Interest rate risk: If the interest rates in the economy rise, the value of the fund may fall. Investors who want to exit the fund before maturity may have to face losses.
- Inflation risk: The fund may not be able to beat inflation if the inflation rate in the economy is higher than the interest rate on the underlying government securities.
- Liquidity risk: The fund may not be able to sell its underlying government securities at a fair price due to the lack of liquidity in the market.
Such type of Mutual fund already exists in the market.
There are similar mutual funds in the market, such as SBI Magnum Gilt Fund, ICICI Prudential Constant Maturity Gilt Fund, and UTI Gilt Fund. However, the key difference between these funds and Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund is the maturity period of the underlying securities.
Also Read: 6 Ways To Measure Risk In Mutual Funds
Who is Most Suitable for This Mutual Fund?
This mutual fund is suitable for investors who are looking for a low-risk investment option with steady returns. Since the fund invests in government securities with a fixed maturity date, it is suitable for conservative investors who want to avoid market volatility. Moreover, since the interest income from the securities is tax-free, it is also suitable for investors who want to minimize their tax liability.
How to invest in Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund:
To invest in this scheme, you can buy units of Rs. 10 each with a minimum investment of ₹1000 and in multiples of Re 1 thereafter. You can choose between the Regular Plan and the Direct Plan, both of which offer only the Growth Option. However, the fund house reserves the right to introduce more options later.
The Direct Plan is available only for investors who buy units directly with the fund. However, the distribution of IDCWs will depend on the availability of distributable surplus.
In conclusion, the Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund is a low-risk investment option for investors who want to generate regular income over a long-term investment horizon. However, investors need to be aware of the risks associated with investing in debt funds and should assess their investment objectives before investing in this NFO.
